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Q&A: NAB CEO Gordon Smith

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Gordon Smith 2015

FM chips, AM revitalization, performance royalty—there’s no shortage of regulatory matters on Gordon Smith’s to-do list. With the Radio Show less than two weeks away, Inside Radio cornered the National Association of Broadcasters CEO for the latest on these and other pressing radio issues.

There is a heightened artist and label presence at the Radio Show. Is this a sign of greater collaboration between the two industries?

Certainly it is, though we have always tried to include artists at the Radio Show and to foster understanding and hopefully progress because it’s very clear, as Nielsen’s new study makes abundantly evident, that AM/FM radio continues to be the No. 1 place for listeners to discover new music. We are very anxious to grow the music industry without penalizing its very best platform, which is radio.

There are 211 co-sponsors in the House for the NAB-backed, anti-performance royalty resolution. When do you expect to hit the 218 majority number and what impact do you expect that to have?

It’s a very powerful impact because clearly nothing can pass that has 218 votes against it. We expect in the coming days to go over that number. We did in the last Congress and we’re well ahead of the sign-ups compared to this time in the last Congress. There are so many issues in Congress right now. When leadership and committee chairs see these kinds of numbers, vs. 13 on the other side, it’s not an issue that is going to win time on the Congressional calendar.

You met with several FCC commissioners about the AM revitalization proceeding. Are you supportive of the proposed waiver to allow moving FM translators up to 250 miles?

We are supportive of the 250-mile waiver and we’re very thankful for commissioners [Ajit] Pai and [Michael] O’Rielly who really spearheaded [the AM revitalization] effort. We’re hoping for a good outcome. We think this is obviously critical to AM revitalization. We believe that the FCC should implement it as soon as they possibly can. It’s the clearest way to help AM radio to survive and to thrive.

Is opening an FM translator-filing window that would be limited to AM broadcasters essential to the effort?

It’s enormously important and we strongly encourage the commission to include that in this proceeding.

How is the NAB building on the momentum of recent T-Mobile and AT&T decisions to encourage other wireless providers to activate FM chips?

NAB in the beginning made a substantial financial contribution to the development of an FM chip. Enormous credit has to be given to the tenacity of [Emmis CEO] Jeff Smulyan and his leadership in these market agreements that have been won with Sprint, AT&T and T-Mobile. Congress has made it clear to us that while a mandate is not something we’ve ever asked for, they encouraged us to continue to work the market angle and that seems to be working, particularly with the appropriate pressure being given by public officials, both in the Administration and on the Hill, that for reasons of public safety, this really is an essential public service. Hopefully all of the phone companies and Apple will soon recognize its contribution to the welfare of the American people, not the least of which were comments by [FEMA administrator Craig Fugate] about how essential the FM chip can be in an emergency situation.

Many members of Congress and even a few at the FCC have encouraged the telecom companies to see this as additive—there are economic opportunities for those companies to add FM chips. With access to public airwaves there comes public responsibilities, too. When it comes to public safety there is no substitute for a radio tuner to be working in a cellphone, which is really the platform for the 21st century. We all have a stake in public safety, even the telecom companies.

What are you hoping for from the Copyright Royalty Board’s pending ruling on streaming audio royalty rates?

It can be summed up in two words—lower rates. If they go higher, it will simply be a platform that will flatline because a very small portion of radio can participate in the streaming platform now because there’s no profit in it. If the rates can be reasonable, the volume will increase and the dollars will be greater. 

The U.S. House Judiciary Committee is mounting a copyright listening tour that starts in Nashville on Tuesday. Is an update to music copyright laws inevitable?

We've been told by the Congressional offices [of committee chairman Bob Goodlatte (R-VA) and ranking member John Conyers (D-MI)] that this is a listening tour as part of a larger copyright issue, that chairman Goodlatte is especially interested in. And we’ve supported some parts of it, like the Copyright Office update. As to specifically music, in Washington nothing is ever permanent. It’s possible that something eventually will happen but it’s improbable that anything will ever happen without a full consideration of the radio industry’s concerns. We remain engaged and while they’re listening we hope that we are heard because we certainly have vast and deep support on Capitol Hill for our position. 

What is the NAB position on performance royalties for pre-1972 recordings?

We have filed an amicus brief with a number of courts in support of the SiriusXM and Pandora positions. The greatest difficulty is that this is being taken to state court and this we believe is ultimately best handled at the federal level. So we are engaged on the issue but it becomes extremely complicated if it’s done on a state-by-state basis.